WEBVTT - Markets Tumble, Chip Makers See Low Demand 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.360 --> 0:00:10.879 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:27.000 Emily Jay. I'm Emily Changing in San Francisco, and this 0:00:27.040 --> 0:00:29.440 is Bloomberg Technology coming up in the next hour of 0:00:29.640 --> 0:00:34.159 robust US labor market spells bad news for financial markets. 0:00:34.159 --> 0:00:38.199 Today's jobs report sent shares tumbling as investors predict more 0:00:38.280 --> 0:00:40.519 rate hikes. We're going to talk about why tech is 0:00:40.560 --> 0:00:45.400 in a particularly tough position plush. Chipmakers warn of a 0:00:45.600 --> 0:00:48.680 major industry slowdown, sending tech shares even though we're the 0:00:48.760 --> 0:00:51.320 biggest names from a m D to Samsung and Micron 0:00:51.800 --> 0:00:56.520 are all saying the same thing. Demand is tumbling. Gonna 0:00:56.520 --> 0:00:59.560 have more on that in a moment. And Facebook is 0:00:59.600 --> 0:01:03.760 sending its own warning to users you may have been hacked. 0:01:04.040 --> 0:01:08.000 Meta says one million user logins may have instolen compromised. 0:01:08.440 --> 0:01:11.440 Later this hour, we're gonna talk to Meta security policy director. 0:01:12.120 --> 0:01:15.920 Chip makers warning weekly that demand is faltering, this as 0:01:15.959 --> 0:01:18.720 they face surging shipping and materials costs, and in the 0:01:18.800 --> 0:01:22.240 latest sign of trouble, Samsung and a m D reporting 0:01:22.319 --> 0:01:26.920 these disappointing results. Bloomberg's Ian King, our residentship expert with US. Now, 0:01:27.160 --> 0:01:30.600 So Ian didn't we know demand was bad? Why are 0:01:30.640 --> 0:01:33.479 we seeing such a strong reaction here? Absolutely? Right. We've 0:01:33.520 --> 0:01:35.480 had companies going out there for a while and I 0:01:35.560 --> 0:01:37.600 was saying, yeah, things things are getting bad. We've got 0:01:37.600 --> 0:01:42.400 a lot of infantry. What happened yesterday provoked unless to 0:01:42.440 --> 0:01:46.840 be writing with thoughts with expletives in the headlines. I mean, 0:01:47.240 --> 0:01:49.840 it was really bad for ame d and ED actually 0:01:49.920 --> 0:01:53.440 sold something a bit short. Yes, it's the biggest memoryship maker, 0:01:53.480 --> 0:01:56.400 but it's also the world's biggest hip maker. Company like 0:01:56.560 --> 0:01:59.000 that comes out and says, yeah, things are actually bad. 0:01:59.400 --> 0:02:01.920 It's it's not just bad, but it's way worse than 0:02:01.960 --> 0:02:05.800 we thought. So that's kind of recalibrating people's expectations. They're 0:02:05.800 --> 0:02:08.079 no longer just looking for the bottom. They're back to 0:02:08.160 --> 0:02:11.960 worrying about how about get it meantime, and you've got 0:02:12.120 --> 0:02:15.120 the White House adding new restrictions on China's access to 0:02:15.280 --> 0:02:19.560 US chip technology. Is that making things worse here? Absolutely? 0:02:19.639 --> 0:02:23.040 That's a that's an ongoing concern because this isn't just 0:02:23.600 --> 0:02:27.320 one isolated incident. This is like an incremental set of 0:02:27.480 --> 0:02:32.600 increases of intensification in this dispute between the world's two 0:02:32.680 --> 0:02:35.280 largest economies. And you know, if you're an investor out there, 0:02:35.320 --> 0:02:37.880 you're thinking, well, what's going to happen next? And the 0:02:38.000 --> 0:02:43.360 trend within these you know, so called security related national 0:02:43.440 --> 0:02:47.680 security related measures is to intensify, is to broaden them, 0:02:47.919 --> 0:02:50.560 and that's going to place greater restrictions on chipmakers that 0:02:50.639 --> 0:02:52.400 want to do business in China. Talk to us a 0:02:52.440 --> 0:02:54.760 little bit more about what's behind these new rules from 0:02:54.840 --> 0:02:58.639 Washington and how you expect these two evolve. Well, just 0:02:58.720 --> 0:03:01.400 to give you an example, we had a story out 0:03:01.440 --> 0:03:05.200 earlier this week which had that Huawei, which is a 0:03:05.280 --> 0:03:07.400 company that we know, a Chinese company that's been on 0:03:07.520 --> 0:03:09.359 this sort of entity list in the US for a 0:03:09.440 --> 0:03:12.440 long time, being cut off from US technology, it's actually 0:03:12.520 --> 0:03:16.440 taking steps to work around that. So obviously there is 0:03:16.480 --> 0:03:18.840 a concern in Washington. There are a lot of Washington 0:03:18.880 --> 0:03:20.679 who are saying, look, we need to get tougher, We 0:03:20.760 --> 0:03:23.280 need to do more and more to really choke off 0:03:23.400 --> 0:03:27.000 China's ability. That just being better than China and technology 0:03:27.160 --> 0:03:29.239 isn't good enough. We have to make sure that we 0:03:29.400 --> 0:03:33.560 freeze China's technology and where multiple generations ahead and as 0:03:33.560 --> 0:03:35.680 while driving this, So how do you think this is 0:03:35.720 --> 0:03:38.880 going to impact the ongoing relationship between the US and 0:03:39.000 --> 0:03:41.720 China as it pertains to chips. Yeah, I mean, we 0:03:41.800 --> 0:03:44.400 haven't seen any reaction from Beijing yet, and I've heard 0:03:44.440 --> 0:03:48.240 people say we're surprised that Beijing has been so restrained 0:03:48.360 --> 0:03:53.400 so far. Fundly, China is the largest market for semiconductors. 0:03:53.560 --> 0:03:56.080 If you're a US company, if you're a European company 0:03:56.080 --> 0:03:58.440 in the industry, you have to be there. You have 0:03:58.680 --> 0:04:03.160 to have those sales revenue to fuel your investing in 0:04:03.240 --> 0:04:05.560 innovation to stay ahead. So it's a it's a very 0:04:05.640 --> 0:04:10.160 difficult situation for Washington to sort of navigate that fine 0:04:10.240 --> 0:04:13.040 line between cutting off China from what it doesn't want 0:04:13.080 --> 0:04:15.680 it to have and also keeping the money flowing and 0:04:15.920 --> 0:04:18.800 keeping US companies having the R and D edge and 0:04:19.120 --> 0:04:22.200 staying on the leading edge in terms of the technical ability. 0:04:22.560 --> 0:04:24.840 All Right, Ian King, who has of course covered the 0:04:24.920 --> 0:04:27.240 chip industry for a couple of decades, and thank you 0:04:27.880 --> 0:04:31.640 um for your expert insights today. Appreciate it. Meantime, Tesla's 0:04:31.839 --> 0:04:34.080 all electric Chuck will roll out before the end of 0:04:34.120 --> 0:04:36.800 the year. In a tweet, Elon Musk said production has 0:04:36.880 --> 0:04:40.320 begun and the first deliveries will had to PepsiCo December one. 0:04:41.000 --> 0:04:44.800 The Big Rig was first unveiled November, but the launch 0:04:44.880 --> 0:04:48.480 delayed many times due to battery cell shortages and a 0:04:48.520 --> 0:05:01.719 decision to focus on consumer models. As we discussed at 0:05:01.720 --> 0:05:03.320 the top of the show, was a brutal day on 0:05:03.440 --> 0:05:06.600 Wall Street after the September jobs report, the NASDAC one 0:05:07.200 --> 0:05:10.840 plunging more than four percent as more severe fed rate 0:05:10.920 --> 0:05:14.360 hikes are priced into the markets. Chip makers got crushed 0:05:14.520 --> 0:05:18.000 after manufacturers warned of an industry wide slowdown and demand. 0:05:18.240 --> 0:05:20.240 I want to bring in Sara const managing director at 0:05:20.279 --> 0:05:23.520 Cleo Capital. So, Sarah, how alarming are these warnings from 0:05:23.600 --> 0:05:26.960 chip makers in your view? I mean, the only chips 0:05:27.080 --> 0:05:29.640 right now, anyone wants our potato, right, Like, this is 0:05:29.800 --> 0:05:33.680 not good for chip makers. Uh, there's twin pressures here, right, 0:05:33.720 --> 0:05:36.920 Certainly the weekend consumer demand for things like PCs, but 0:05:37.120 --> 0:05:40.479 also you know, the increasing restrictions around selling to China 0:05:40.880 --> 0:05:44.200 mean that a massive market is largely off limits. And 0:05:44.279 --> 0:05:46.760 so that's also going to cause problems for the hardware 0:05:46.839 --> 0:05:49.640 companies because you know, they're the ones who aren't buying 0:05:49.680 --> 0:05:52.000 the chips, so they're not selling hardware. And I think 0:05:52.080 --> 0:05:54.800 Apple's you know, lowered forecast for for some of the 0:05:54.839 --> 0:05:57.000 models of its new iPhone is sort of an early 0:05:57.120 --> 0:05:59.800 indicator of the trouble to come. So when you look 0:05:59.839 --> 0:06:02.719 at other areas of technology, you know, their social media, 0:06:02.760 --> 0:06:05.440 there's advertising, their streaming, you know, where do you see 0:06:05.520 --> 0:06:10.400 other potential problem areas everywhere? Uh, you know, I think 0:06:10.520 --> 0:06:14.159 that that it's just gonna be a tough you know quarter. 0:06:14.360 --> 0:06:16.920 I think that that advertising. You know, we're seeing a 0:06:17.040 --> 0:06:21.479 slump based on the waning consumer demand. So you know, Google, Pinterest, Snap, Meta, 0:06:21.800 --> 0:06:23.760 they're all probably going to be in for a tough 0:06:23.800 --> 0:06:26.440 holiday season. And you know, most of the rallies right 0:06:26.480 --> 0:06:29.080 now in tech, they're not based on fundamentals. And and 0:06:29.520 --> 0:06:31.839 the reality is that the fact show a really bleak 0:06:32.000 --> 0:06:35.640 picture for all of these really high price, often unprofitable 0:06:35.680 --> 0:06:38.800 companies that just have flown so high over the last 0:06:38.839 --> 0:06:41.760 few years. And even now when their stock prices are 0:06:41.839 --> 0:06:45.080 coming down, you look at you know, their their pe ratios, 0:06:45.080 --> 0:06:48.120 they're still insane. The you're just still really expensive companies. 0:06:48.520 --> 0:06:51.720 So how much more tech volatility are you preparing for? 0:06:52.000 --> 0:06:55.279 Like a, are you preparing for this downturn to last 0:06:55.320 --> 0:06:57.960 a good long time? Uh, yeah, I am a bear 0:06:58.160 --> 0:07:01.200 preparing for a long cold wind. Her Um. I think 0:07:01.279 --> 0:07:03.680 it's there's just not a lot to be bullish about 0:07:03.800 --> 0:07:06.279 right now in the US, you know, with the FEDS 0:07:06.520 --> 0:07:09.920 very hawkish stance even today about inflation, and you know, 0:07:10.080 --> 0:07:12.160 the right the rate hikes are going to continue until 0:07:12.160 --> 0:07:15.240 the moral improves, and that's probably not till mid delayed 0:07:15.280 --> 0:07:18.760 twenty three, and then globally things are just way worse. 0:07:19.000 --> 0:07:21.720 Right we are the bright spot right now globally. Uh 0:07:21.960 --> 0:07:25.720 you know, the UK is in is in chaos, you know, Russia, China, 0:07:26.720 --> 0:07:29.760 all of the problems that global central banks are having 0:07:29.880 --> 0:07:32.760 because of the US dollar strength right now, there's just 0:07:32.920 --> 0:07:35.520 a lot of problems and I think you have to 0:07:35.600 --> 0:07:38.160 batten down the hatches, you know. I'm a fan of 0:07:38.280 --> 0:07:40.520 selling rallies right now if you can get out with 0:07:40.600 --> 0:07:43.560 a profit on something and and just buying the dips 0:07:43.720 --> 0:07:47.160 really carefully, Like if you're passionate about a core business 0:07:47.200 --> 0:07:50.280 and see a reasonable pe ratio and it's a historic 0:07:50.400 --> 0:07:53.600 low for the company, maybe consider buying. But I'm not 0:07:53.720 --> 0:07:56.080 even looking at like the fifty two week or year 0:07:56.120 --> 0:07:58.680 to date right now numbers. I'm looking at the five 0:07:58.760 --> 0:08:01.600 year charts and saying is this company you know where 0:08:01.680 --> 0:08:05.080 it was before covid or is it still priced way 0:08:05.200 --> 0:08:08.000 higher because of the bumpet got during the pandemic? So 0:08:08.320 --> 0:08:11.640 how is this impacting your strategy and and other venture 0:08:11.680 --> 0:08:13.920 capitalist strategy. I mean we've been talking about all this 0:08:14.080 --> 0:08:17.400 dry powder that's probably stacking up on the sidelines with 0:08:17.880 --> 0:08:20.640 nowhere to go. Yeah, So you know, I think M 0:08:20.680 --> 0:08:22.560 and A is the new I p O for companies. 0:08:22.600 --> 0:08:25.680 I think right now startups are are less focused on 0:08:25.800 --> 0:08:27.760 an I p O. You know, we saw that a 0:08:27.840 --> 0:08:30.200 lot of those tech I p o s aren't working. Um, 0:08:30.280 --> 0:08:33.199 you know posh marks exit from the public markets was 0:08:33.440 --> 0:08:35.800 was a big piece of that. You know, the Peloton 0:08:35.960 --> 0:08:39.160 ceo flat out saying that you know, six more months 0:08:39.240 --> 0:08:42.680 and they're gonna sell out and and you know go private. 0:08:42.840 --> 0:08:45.880 Is it's a good indicator that that's staying public as 0:08:45.960 --> 0:08:49.640 an unprofitable tech company right now is just tough. So 0:08:49.760 --> 0:08:51.400 I think that we're going to see a lot more 0:08:51.760 --> 0:08:54.400 late stage M and A activity and less bell ringing. 0:08:54.840 --> 0:08:56.720 And you know, when it comes to the dry powder, 0:08:56.960 --> 0:08:59.360 vcs have a lot of it, but they're sitting on it. 0:08:59.480 --> 0:09:02.160 You know what I'm hearing from my peers at top 0:09:02.240 --> 0:09:06.079 doctile funds, they're spending more time in Monday meetings triaging 0:09:06.120 --> 0:09:09.040 their current portfolios than they are looking at new deals. 0:09:09.400 --> 0:09:12.040 Then this is in large part because these you know, 0:09:12.200 --> 0:09:16.120 these new deals founders are still asking for prices from 0:09:16.280 --> 0:09:20.880 vcs who are very much in a recession mindset. And 0:09:20.960 --> 0:09:24.240 I think until vcs can get into deals at prices 0:09:24.320 --> 0:09:27.520 that better reflect this moment, a lot of my peers 0:09:27.559 --> 0:09:30.280 are just sitting on the sideline and focusing on following 0:09:30.360 --> 0:09:33.080 on the companies they're already on boards of. We're likely 0:09:33.160 --> 0:09:35.240 to have a tough time in the coming months. So 0:09:35.480 --> 0:09:37.760 talking about light stage M and I gotta ask your 0:09:37.800 --> 0:09:40.960 thoughts on the latest in the elon Musk Twitter saga Twitter, 0:09:41.320 --> 0:09:43.360 you know, holding Musk to the terms of the deal, 0:09:44.080 --> 0:09:47.360 you know, at the price, not accepting anything lower, Musk 0:09:47.480 --> 0:09:50.920 saying okay, I'll go through. I say, you know, what's 0:09:50.920 --> 0:09:52.880 your take on what's happening here, whether or not this 0:09:52.960 --> 0:09:56.359 deal is actually gonna happen. I mean, so many embarrassing 0:09:56.440 --> 0:10:01.280 text messages, just so many, that's Saudie hac level in 0:10:01.360 --> 0:10:04.960 Parrasine tech messages, right, And I think that the whole 0:10:05.000 --> 0:10:07.760 situation is just getting to a point where, you know, 0:10:07.960 --> 0:10:11.760 Ellen's displaying what seems to be a rare moment of 0:10:11.880 --> 0:10:14.920 accepting reality and saying, look, I agreed to buy it, 0:10:15.040 --> 0:10:16.839 so now I'm going to have to buy it, and 0:10:17.160 --> 0:10:19.760 you know, I think that that's the best outcome for shareholders. 0:10:19.960 --> 0:10:22.360 Will that be the best outcome for Twitter users, for 0:10:22.440 --> 0:10:25.599 Twitter employees, I don't know, but at this point it 0:10:25.679 --> 0:10:29.200 looks like that's what's going to happen, all right. Sarah Kunst, 0:10:29.320 --> 0:10:32.960 Managing Director, clayo Capital love having you here, Sarah, Thank 0:10:33.000 --> 0:10:37.720 you so much for joining us on this volatile Friday afternoon. Okay, 0:10:37.880 --> 0:10:40.360 coming up, Disney and DraftKings and Bloomberg report about a 0:10:40.480 --> 0:10:44.800 DraftKings ESPN deal in the works send shares higher. But 0:10:44.920 --> 0:10:48.960 how does the family brand embrace sports gambling? Talk about 0:10:49.000 --> 0:11:06.280 that next? This is Bloomberg. ESPN is nearing a large 0:11:06.480 --> 0:11:09.800 new partnership with sports betting firm Draft Kings, a deal 0:11:09.880 --> 0:11:11.839 which would pave the way for the media giant to 0:11:11.920 --> 0:11:15.720 capitalize on the growing wave of legalized sports betting. Shares 0:11:15.760 --> 0:11:19.240 of DraftKings spike this afternoon on this Bloomberg report. Disney 0:11:19.440 --> 0:11:22.160 already has a stake in draft Kings here to discuss 0:11:22.200 --> 0:11:24.280 our Bloomberg deals, Reporter Crystal Z. So, what do we 0:11:24.320 --> 0:11:26.800 know about this agreement, Crystal? So, so far all we 0:11:26.920 --> 0:11:29.640 know is that there is an intention for a large 0:11:29.960 --> 0:11:34.880 partnership between draft Kings and ESPN, which is owned by Disney. 0:11:35.240 --> 0:11:37.160 But how exactly is this deal going to be structured, 0:11:37.280 --> 0:11:39.160 how is it going to be paid? We so we 0:11:39.200 --> 0:11:40.760 don't have much detail on it. But it would be 0:11:40.880 --> 0:11:43.920 a really really big step for ESPN to really take 0:11:43.960 --> 0:11:47.839 advantage of that, legalizing sports betting in almost half of 0:11:47.880 --> 0:11:50.360 the country now, and it will be a real cultural 0:11:50.400 --> 0:11:54.920 shock for ESPN because Disney has this really wholesome um 0:11:55.280 --> 0:11:58.319 image that they have and getting into sports betting it's 0:11:58.320 --> 0:12:01.400 actually a really really big st Now there's been speculation 0:12:01.480 --> 0:12:04.560 about an acquisition. Is this a step in that direction 0:12:04.760 --> 0:12:07.959 or no? So because of that cultural difference, um, it 0:12:08.120 --> 0:12:13.400 will right now, we're not hearing about outright acquisition. So 0:12:13.640 --> 0:12:17.280 in order to do that, so Drafting here is the 0:12:17.360 --> 0:12:20.640 license holder for sports betting, So if THESPN really want 0:12:20.679 --> 0:12:22.720 to get into it in a really really big way, 0:12:23.040 --> 0:12:24.760 it would make sense for them to buy. And also 0:12:24.840 --> 0:12:28.160 note that Draft Kings stock price of trading around sixteen dollars, 0:12:29.200 --> 0:12:32.920 but it's high. In March last year was around so 0:12:32.960 --> 0:12:34.560 you could say that it's a really really cheap buy. 0:12:35.200 --> 0:12:39.320 But for Disney shareholder to get over that wholesomeness reputation 0:12:39.480 --> 0:12:42.079 of Disney, it will still be a big leap, and 0:12:42.520 --> 0:12:45.199 we're not sure if that's uh, if they're ready to 0:12:45.280 --> 0:12:47.440 make that step. Yes, So actually a lot of analysts 0:12:47.440 --> 0:12:49.800 have dismissed the m and A speculation, but we shall see. 0:12:50.320 --> 0:12:52.319 What about when it comes to, you know, other sports 0:12:52.400 --> 0:12:56.360 scambling platforms More broadly, I feel like I've heard about draft, 0:12:56.440 --> 0:13:00.000 We've heard some draft kings m N a UM specular 0:13:00.000 --> 0:13:03.120 relation for a couple of years. So Draft king is 0:13:03.160 --> 0:13:06.040 in a really really competitive space and they are constantly 0:13:06.080 --> 0:13:09.800 at war with UM places like fanjuel, and they're all 0:13:09.840 --> 0:13:12.960 offering these really really cheap discount or even giving UM 0:13:13.320 --> 0:13:16.120 users free money just to get on their platform. So 0:13:16.679 --> 0:13:20.199 there is a lot of room for consolidation. And with 0:13:20.440 --> 0:13:23.079 this partnership with ESPN, even how it looks like it 0:13:23.120 --> 0:13:25.959 will still be unclear. It could really emerge looking like 0:13:26.280 --> 0:13:29.040 a new platform. It could look like an ESPN platform, 0:13:29.440 --> 0:13:31.120 or it could look like an extra button on the 0:13:31.200 --> 0:13:34.280 existing ESPN app so it could probably look like it 0:13:34.320 --> 0:13:38.200 would look more crowded, um than than less. But you're right, 0:13:38.280 --> 0:13:41.400 like there could be more deals. Draft Kings hasn't been 0:13:41.440 --> 0:13:43.560 public for that long. They only go in public through 0:13:43.640 --> 0:13:46.880 respect a year ish ago, so whether they are ready 0:13:46.920 --> 0:13:50.200 to take on a big deal it's also um waiting 0:13:50.240 --> 0:13:52.120 to be seen. And you know, obviously the stock price 0:13:52.240 --> 0:13:54.400 not doing too well for them to sell equity would 0:13:54.400 --> 0:13:57.240 also be really challenging. So there will be consolidation in 0:13:57.280 --> 0:13:59.319 the space. We just don't know who are buying who 0:13:59.400 --> 0:14:02.680 is selling it. And what's your take on the pace 0:14:02.760 --> 0:14:04.319 of M and A and I p o s through 0:14:04.400 --> 0:14:06.600 the end of the year, given this is your beat 0:14:06.640 --> 0:14:08.640 and we've where you know, we just had a guest 0:14:08.640 --> 0:14:11.559 who said she's bundling up for a long cold winter. Yeah, 0:14:11.640 --> 0:14:13.640 she was just saying, how I M and A is 0:14:13.640 --> 0:14:15.400 a new ip here, right, and that was absolutely true. 0:14:15.400 --> 0:14:17.839 We haven't really seen many many I p o s 0:14:17.920 --> 0:14:22.480 and usually this time post Labor Day pre Thanksgiving has 0:14:22.760 --> 0:14:25.840 historically been the most popular time for I p O 0:14:25.920 --> 0:14:28.720 and we haven't really seen any of them. And um, 0:14:29.040 --> 0:14:32.080 there's always been speculation about you know, there have been 0:14:32.160 --> 0:14:34.800 one or two companies that could still go public this year, 0:14:35.400 --> 0:14:37.720 and it's been quiet, and you know M and A. 0:14:37.920 --> 0:14:40.920 It's also em and is coming back in some way. 0:14:41.040 --> 0:14:43.760 But financing has been extremely challenging. And if you look 0:14:43.840 --> 0:14:47.800 at technology that are growthing, uh and not really generating 0:14:47.840 --> 0:14:50.400 cash flow, those are not things that investors are liking 0:14:50.520 --> 0:14:52.960 right now. So all know, if you're a growth company 0:14:53.320 --> 0:14:54.880 that are looking to I p O or doing M 0:14:54.920 --> 0:14:57.400 and A, it's still a really, really tough environment. So 0:14:57.720 --> 0:15:00.600 um A lot of dealmakers are saying that we should 0:15:00.640 --> 0:15:03.640 probably expect you're making to come back in three even 0:15:03.760 --> 0:15:06.400 the second quarter and even the first quarter, and all 0:15:06.480 --> 0:15:09.880 that would be market dependent obviously, so we will will 0:15:10.000 --> 0:15:12.200 continue to tract to all right, the second quarter of 0:15:13.760 --> 0:15:17.080 we'll looking towards that. Bloomberg's Crystal Z thank you so 0:15:17.320 --> 0:15:21.280 much for staffing by and as we talk about media 0:15:21.320 --> 0:15:23.720 companies looking for ways to cash in as more US 0:15:23.760 --> 0:15:28.120 states legalized sports betting, Bloomberg The lineup with Damien sass 0:15:28.160 --> 0:15:31.360 Hour and Kaylee Lines continues the conversation tonight, seven pm 0:15:31.560 --> 0:15:43.840 New York Time. You don't want to miss it. Welcome 0:15:43.880 --> 0:15:45.920 back to Bloomb're technology and Emily changing in San Francisco. 0:15:46.000 --> 0:15:47.760 Let's get back to the markets and the big story 0:15:47.840 --> 0:15:52.160 of the week, Ellen and his Twitter takeover potentially not 0:15:52.240 --> 0:15:55.440 a done deal yet. Are at Ludlow has been looking 0:15:55.560 --> 0:15:58.640 a little deeper here at what's the latest that we know? Yeah, well, 0:15:58.680 --> 0:16:01.400 Friday was unusual when and so far there was absolutely 0:16:01.520 --> 0:16:03.360 no news about the deal at all, which was a 0:16:03.400 --> 0:16:05.520 massive relief for me and you because we haven't slept 0:16:05.560 --> 0:16:07.640 for four days. But you would look at this monster 0:16:07.760 --> 0:16:09.960 jump in Twitter shares from Tuesday when we had that 0:16:10.080 --> 0:16:12.960 disclosure that Elon Musk had gone back to Twitter and 0:16:13.120 --> 0:16:16.200 back to the original offer fifty tents a share. But 0:16:16.320 --> 0:16:18.760 in the four sessions that have followed, the stock has 0:16:18.840 --> 0:16:22.520 trickled lower again because there are concerns about the financing 0:16:22.560 --> 0:16:25.320 element of this deal, how likely it is to happen. 0:16:25.560 --> 0:16:27.560 And we still continue to look at the spread. Right, 0:16:27.560 --> 0:16:29.400 if we bring up the spread chart, this is the 0:16:29.480 --> 0:16:32.240 gap between that fifty four dollar twenty cents per share 0:16:32.320 --> 0:16:34.840 offer and the current share price, and again it has 0:16:35.000 --> 0:16:38.600 noticeably come down in recent sessions. The latest is, you know, 0:16:38.840 --> 0:16:41.840 m is that Judge Kathleen St. Jude mccormicker of Delaware 0:16:41.920 --> 0:16:46.160 Chancery Court has suspended, paused the trial until October and 0:16:46.240 --> 0:16:48.800 told the two sides that they need to close the 0:16:48.880 --> 0:16:51.840 deal by five pm on October. If they do not, 0:16:52.160 --> 0:16:54.800 then we're heading to trial in November. And the market 0:16:54.960 --> 0:16:58.160 is trying to pass what's actually happening behind the scenes. 0:16:58.360 --> 0:17:00.800 In the broader context of market. It's a really interesting 0:17:00.880 --> 0:17:03.840 stock to watch, is of course, Tesla. Tesla just had 0:17:04.160 --> 0:17:09.600 its worst week since March of March. And it's not 0:17:09.760 --> 0:17:12.240 just the idea that Elon Musk might have to sell 0:17:12.600 --> 0:17:15.520 Tesla shares in order to fund some of the financing 0:17:15.760 --> 0:17:18.400 to buy Twitter, but also this idea that there's key 0:17:18.440 --> 0:17:20.920 man risk that will be distracted if he runs a 0:17:21.000 --> 0:17:24.320 third company on top of Tesla and SpaceX. But the 0:17:24.440 --> 0:17:28.320 gap between the SMP performance and Tesla, it's been a 0:17:28.400 --> 0:17:31.679 real drag on a points basis for that broader index. 0:17:31.760 --> 0:17:34.399 And it's not just, of course, the news cycle. Tesla 0:17:34.480 --> 0:17:37.119 does trade at higher multiple and so is vulnerable to 0:17:37.200 --> 0:17:40.280 the narrative around higher rates. But you know so much 0:17:40.320 --> 0:17:41.720 going on at work here. You and I are not 0:17:41.800 --> 0:17:44.959 going to Delaware on October seventeenth, But on a daily basis, 0:17:45.040 --> 0:17:47.800 we continue to track this deal all right, I'd love 0:17:48.200 --> 0:17:51.679 hope you get some sleep this weekend. Well, you might 0:17:51.720 --> 0:17:55.080 have received an alert from Meta today saying you may 0:17:55.240 --> 0:17:57.960 have logged onto Facebook from a malicious app. What does 0:17:58.000 --> 0:18:01.480 that mean? Well, Matter has reported more than four hundred 0:18:01.600 --> 0:18:06.399 credential theft malware apps to Google and Apple targeting mobile 0:18:06.480 --> 0:18:10.200 users devices to steal their Facebook log and information. The 0:18:10.280 --> 0:18:13.600 apps were disguised as things like photo editors, mobile games, 0:18:13.680 --> 0:18:17.120 health trackers, and they can target more than just Facebook accounts. 0:18:17.200 --> 0:18:20.480 For more on this, metas director of Threat Disruption, David 0:18:20.520 --> 0:18:23.040 Agranovich joins me. Now, David, thank you so much for 0:18:23.160 --> 0:18:26.040 joining us so talk to us about these apps, what happened, 0:18:26.400 --> 0:18:28.680 and how people can protect themselves. Thanks so much for 0:18:28.720 --> 0:18:31.280 having me, Emily, and appreciate the opportunity to talk about 0:18:31.280 --> 0:18:35.040 this report. Today, we released some research into four hundred 0:18:35.119 --> 0:18:38.800 malicious mobile applications. They were designed to steal Facebook log 0:18:38.840 --> 0:18:41.600 and information. And the apps were listed on the Google 0:18:41.640 --> 0:18:44.719 Play Store on Apple's App Store, and they would disguise 0:18:44.760 --> 0:18:48.439 themselves as a variety of different things VPN services, business apps, 0:18:48.560 --> 0:18:51.720 mobile games, different utilities for your phone to try and 0:18:51.800 --> 0:18:55.040 trick people into downloading them. How do you know if 0:18:55.080 --> 0:18:59.080 you've been affected, like, how can you tell? So? Because 0:18:59.160 --> 0:19:02.000 these applications are available on the open Internet, it's no 0:19:02.280 --> 0:19:05.440 single company can protect people alone. We also know that 0:19:05.520 --> 0:19:09.840 these scammers constantly adapt to detection UM by app stores, 0:19:09.880 --> 0:19:13.439 by researchers now here. We reported our findings to Apple 0:19:13.560 --> 0:19:15.359 into Google, and as far as we know, all of 0:19:15.440 --> 0:19:18.600 these applications have been taken down. But we also are 0:19:18.640 --> 0:19:22.399 sending notifications to users on our platform who may have 0:19:22.480 --> 0:19:26.560 been impacted by these applications. UM. Those notifications will include 0:19:26.600 --> 0:19:29.560 some steps that people can take to protect their accounts 0:19:29.600 --> 0:19:32.159 more effectively, as well as some tips for how to 0:19:32.280 --> 0:19:35.199 spot these types of applications elsewhere on the Internet. Why 0:19:35.240 --> 0:19:37.560 are you doing this now? I mean surely this has 0:19:37.560 --> 0:19:40.920 happened before, right, So, our teams have been investigating this 0:19:41.119 --> 0:19:44.840 type of malicious application activity for years. We're always looking 0:19:44.920 --> 0:19:49.359 for malware or other efforts to steal people's credentials. UM, 0:19:49.560 --> 0:19:52.680 but this particular p s A is the first time 0:19:52.720 --> 0:19:55.359 we're releasing one of these kind of public service announcements. 0:19:55.400 --> 0:19:58.040 And the idea is that in addition to working to 0:19:58.119 --> 0:20:01.600 get these apps taken down, providing tools for people to 0:20:01.720 --> 0:20:04.920 identify those apps, we felt it was important for people 0:20:05.240 --> 0:20:07.800 to have tips that they can use both to keep 0:20:07.880 --> 0:20:11.359 themselves safer on our platform and also to stay safe 0:20:11.400 --> 0:20:13.280 across the internet, so that they know what to look 0:20:13.359 --> 0:20:15.080 for if someone is trying to target them with an 0:20:15.119 --> 0:20:18.600 application like this. Now, you also worked at the U. S. Government, 0:20:18.720 --> 0:20:23.520 You led efforts to address foreign interference in democratic systems 0:20:23.560 --> 0:20:27.200 and elections. We've got a midterm election coming up. What 0:20:27.240 --> 0:20:29.080 are you most concerned about and how ready do you 0:20:29.160 --> 0:20:32.600 think META is this time? So whenever there's an election, 0:20:32.720 --> 0:20:35.359 we know we have to stay vigilant. Our teams are 0:20:35.359 --> 0:20:38.080 continuing to monitor for any kind of threats on the 0:20:38.280 --> 0:20:41.560 on our platform, and a good example of this would 0:20:41.560 --> 0:20:44.280 be just last week, we released a report into two 0:20:44.440 --> 0:20:48.399 influence operations, one from Russia one from China, um that 0:20:48.640 --> 0:20:51.680 we caught very early, but in that report we included 0:20:51.720 --> 0:20:54.040 a bunch of information about what they were doing, what 0:20:54.200 --> 0:20:56.920 we had found, who we believe was behind the activity, 0:20:57.119 --> 0:20:59.360 and in that case, like we did with the malicious 0:20:59.359 --> 0:21:03.080 apps investing Asian today, we shared information with our partners 0:21:03.119 --> 0:21:06.159 across the industry, with the U. S. Government, and with 0:21:06.240 --> 0:21:08.600 a public to make sure people knew what to expect 0:21:08.680 --> 0:21:11.840 what we were seeing um I spoke with Francis Hogan 0:21:12.040 --> 0:21:14.880 earlier this week, the Facebook whistle blower, and she raised 0:21:14.920 --> 0:21:18.080 some concerns about safety and security in social media, and 0:21:18.200 --> 0:21:21.200 she used an interesting metaphor, take a listen to this. 0:21:21.600 --> 0:21:24.720 Right now, we can't see behind the curtain of social media. 0:21:24.920 --> 0:21:27.439 We were able to push for safety features and cars 0:21:27.640 --> 0:21:30.640 were found in the partner of transportation, you know, reducing 0:21:30.680 --> 0:21:34.520 the fatality from automobile automobile accents by effectively three and 0:21:34.560 --> 0:21:37.720 a half times because we could actually control cars, you know, 0:21:37.800 --> 0:21:39.639 we can crash test them. Right now, we can't do 0:21:39.760 --> 0:21:41.800 any of those things for social media. We can't crash 0:21:41.880 --> 0:21:44.320 test it, we can't confirm how it could be safer, 0:21:44.400 --> 0:21:46.639 so we don't know what to demand. What do you 0:21:46.680 --> 0:21:49.440 think of her thought there and do you think more 0:21:49.520 --> 0:21:52.840